How Much Will It Cost You To Hire Employees?

From advertising job openings to employee training, recruitment costs can easily add up and make a dent in your company’s bottom line. This is why it’s important to take a strategic approach with your hiring process and to stay updated on understanding employment law in Malaysia or other countries to avoid costly legal mistakes.

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What Makes Up Recruitment Costs?

Advertising and Job Posting Costs

It costs money to post a job opening on different platforms, more so if you need to fill the position urgently.

Job boards and websites, such as LinkedIn and Glassdoor, will typically charge you with a daily budget of $10 for a span of a month.
Some job boards work on a pay-per-click model, with clicks that can go as high as $5 per click. If the role is highly popular and in-demand, the more likely an ad, the higher will be your recruitment spend.
Some charge flat fees for a set period of time. For instance, you’ll have to pay $300 for 30 days. If the position is filled after a week or two, you might not get your money back, depending on the terms and conditions.
Paid ads on Facebook and other social platforms can cost employers $0.63 per click on average.

Recruitment Agency Fees

Different recruitment agencies employ different fee structures.

The contingency fee structure is where you’ll be charged for the services rendered following a successful hire. The cost can be anywhere between 15% and 25% of a new employee’s annual starting salary. If a new hire’s salary in the first year, for example, is $100,000, the recruitment fee will be $15,000 at 15% and $25,000 at 25%.
A retainer fee structure, as the name suggests, is where you pay an agency an agreed-upon amount for a specific period.
A flat fee structure requires you to pay a fixed amount for the services rendered, either paid at one time or split into different milestones.

What if you have an in-house recruitment team? You still have to pay for the salaries and benefits, operational expenses, and the necessary professional training and development.

On-boarding and Training

Depending on the complexity of the role, a new hire may need two weeks to a month of training to familiarize their job responsibilities.

While training, you’re paying them the amount expected of an already trained employee.
You’re spending time and money on the HR team or whoever is assigned to train the new hire.
Study shows that there’s loss of productivity while training is underway. The trainee has yet to become fully productive, while the trainer, who is supposed to handle other responsibilities, is stuck with training.

In addition, you have to provide the tools necessary for the new hires to do their job, including the various tech necessary to boost employee engagement and productivity. With all the expenses involved, many recommend hiring internally rather than someone new. Then, again the choice is restricted to different metrics and considerations. To avoid recruitment mistakes that will cost you time and money, consult experts in employment law at Acclime Malaysia.